Asked by Schyler Molloy on May 02, 2024
Verified
Maria's Mexican Cantina is a restaurant that has been around for 30 years. In that time they have remained in the same building and only changed inputs such as staff and the menu. Based on this, we can conclude that Maria's
A) has only ever operated in the short run.
B) experienced a long run change whenever it changed personnel.
C) has operated in the long run, even though it chose to keep the building input fixed.
D) only operated in the long run if other firms entered or left the industry at this time.
Long Run
A period of time in economics during which all factors of production and costs are variable, allowing for full adjustment to changes.
Short Run
In economics, a period during which at least one of a firm's inputs is fixed and cannot be changed.
Fixed Input
An input in the production process that cannot be changed in the short term, such as buildings or land.
- Acknowledge the divergences between the concepts of short run and long run within economic theories and their pertinence to devising business strategies.
Verified Answer
ZK
Zybrea KnightMay 06, 2024
Final Answer :
C
Explanation :
In economic terms, the long run is a period in which all inputs, including capital assets, can be varied by the firm, but the firm may choose not to change some inputs. Maria's Mexican Cantina choosing to keep the building the same while changing other inputs like staff and the menu indicates operation in the long run, as they had the flexibility to change any input but opted to keep some constant.
Learning Objectives
- Acknowledge the divergences between the concepts of short run and long run within economic theories and their pertinence to devising business strategies.